D&S Practice Pointer: Bona Fide Termination of H-1B Employees

Many employers are aware of the fact that they are responsible for the reasonable cost of a H-1B employee's return transportation home if they terminate an employee prior to the expiration of their H-1B petition.  What many employers don't realize is that this requirement is also an important step in effecting a bona fide termination of an H-1B employee.  In this post, D&S provides some additional information, details, and guidance on ensuring that H-1B employers effect a bona fide termination of an H-1B employee to reduce the risk that they could be subject to payment of back wages and penalties from the Department of Labor (DOL).

In order to ensure that an employer effected a bona fide termination of an H-1B employee for immigration purposes, they must take the following steps when terminating any H-1B employee:

  1. Employee Notification - Clearly inform the H-1B employee that they are terminated (we recommend providing notice of termination in writing);
  2. DHS Notification - Promptly notify DHS in writing by requesting a withdrawal of the H-1B petition; and
  3. Offering to Pay Reasonable Cost of Return Transportation - Promptly offer to pay the reasonable transportation costs for the terminated H-1B employee to return to his or her last foreign address (we recommend making this offer in writing, typically with the notice of termination).  

Note that the reasonable costs of return transportation typically include the cost of an economy class ticket to the employee’s last foreign address and does not include the transportation costs for any of the employee’s family members.

We recommend that employers develop a consistent policy for all terminated H-1B employees and that the offer be made in writing. We also recommend that the offer include a reasonable deadline for the employee to accept the offer (noting that in many cases, the employee will not accept the offer and will instead choose to remain in the United States. Employers have no obligation to ensure a terminated H-1B employee depart the U.S.).  In either case, we recommend that the employee sign a release upon acceptance/rejection of the offer acknowledging that the employer has complied with its obligation to offer to cover their reasonable return transportation costs.  

Employers may offer to cover the cost of return transportation by any of the following methods:

  1. Directly paying for the cost of an economy return ticket (the employer/employer’s travel agent can book the ticket directly);
  2. Offering to reimburse the employee for the reasonable cost of a return ticket home (note if the employer is able to find a comparable ticket at a lower price than that purchased by the foreign national employee, it may be reasonable to reimburse them for the lesser amount in some circumstances); or
  3. Offering the employee a sum approximating the reasonable cost of a return ticket home (employers sometimes include this as part of the severance package for all terminated H-1B employees).

Without a bona fide termination, the DOL has found that the employer’s obligation to pay the former H-1B employee’s wages may continue through the date on which the employer’s H-1B petition expires. The back wages combined with the interest and fines that the DOL may assess can be significant depending on the circumstances. Therefore, D&S urges employers to ensure that they have a consistent practice and procedures in place for DHS and employee notification following termination as well as the means by which they will offer to pay the reasonable cost of the employee's return transportation home.  Employers who have any questions about their obligations in this regard should consult with an experienced immigration attorney.